Documents considered by the Committee on 10 October 2018 Contents

3Unfair trading practices in the food supply chain

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Environment, Food and Rural Affairs Committee

Document details

Proposal for a Directive of the European Parliament of the Council on unfair trading practices in business-to-business relationships in the food supply chain

Legal base

Article 43(2) TFEU, QMV, Ordinary legislative procedure

Department

Environment, Food and Rural Affairs

Document Number

(39625), 7809/18 + ADDs 1–3, COM(18) 173

Summary and Committee’s conclusions

3.1With the aim of improving farmers’ and other small and medium sized enterprises’ (SMEs) position in the food supply chain, the European Commission proposed new legislation on unfair trading practices (UTPs), which are business-to-business practices that deviate from good commercial conduct and are contrary to good faith and fair dealing.

3.2We last considered this proposal at our meeting of 27 June 2018,8 reiterating our original queries as to how sympathetic the Government is to the potential benefits of a coherent EU approach for those UK suppliers trading with buyers elsewhere and what engagement there had been between the Government and such suppliers in formulating the Government’s position.

3.3The Minister for Agriculture, Fisheries and Food (George Eustice) has since written twice. In his most recent letter,9 he explains that there has been some progress in the negotiations. The latest draft sets a transposition deadline of 30 months, which means that the deadline would extend beyond the end of the expected post-Brexit implementation period on 31 December 2020 and therefore the UK would not be required to apply the terms of the Directive. He notes also that the original scope is retained, rather than extending it to cover any actor involved in the agri-food supply chain, regardless of size and role.

3.4As the scope and the transposition period are the two main priorities for the UK, the UK intends to support the progression of the draft into negotiations with the European Parliament when Member State officials (meeting in the Special Committee for Agriculture) next meet to discuss the text. The Minister will keep the Committee informed of developments once negotiations with the European Parliament are underway.

3.5In an earlier letter10 of 20 July, the Minister acknowledged that the Directive should, in principle, protect cross-border supply relationships, but he expressed scepticism about how such relationships would be protected in practice by the proposed Directive, noting the bureaucratic procedures under discussion. The Minister believed that encouraging the development of domestic laws throughout the EU would provide sufficient protection to any UK undertakings which export to large EU businesses.

3.6On stakeholder engagement, he took the view that it would be difficult to undertake any formal engagement as the Directive was still subject to amendments. Meetings had nevertheless been held with “key stakeholders” including the National Farmers Union and the British Retail Consortium to discuss the implications of the proposed Directive.

3.7We note that progress has been made in discussions on this proposal and we understand that officials meeting in the Special Committee for Agriculture on 1 October11 agreed that the draft should progress into negotiations with the European Parliament. We understand too that the European Parliament’s Agriculture Committee adopted its position on the same day, including expansion of the Directive’s scope.

3.8The inclusion of a 30-month transposition period in the Council position—rather than the originally proposed six months with a further six months to apply the legislation—is particularly notable in the light of the UK’s withdrawal from the EU. We ask that the Minister keep us updated on this matter in particular.

3.9Turning to other issues raised, we note that the Government has resisted any “formal consultation” with stakeholders as the proposal is still subject to amendment, but that it has nevertheless been able to hold consultative meetings with “key stakeholders”. While the limited consultation that has taken place is welcome, we remark that formal consultation before legislation is agreed—and can therefore be amended in response to concerns expressed—is good practice both as regards EU legislation and domestic UK legislation. Such an approach is not uncommon.

3.10As we have made clear in our earlier Reports on the matter, though, the proposal remains salient to UK producers regardless of Brexit as it could assist them in their relationships with non-UK buyers. We therefore support the Government’s continued engagement on the proposal and attempts to ensure that the final legislation is workable.

3.11We ask that the Government provide us with an update on the progress of negotiations with the European Parliament by mid-November. In the meantime, the proposal remains under scrutiny. We draw this chapter to the attention of the Environment, Food and Rural Affairs Committee.

Full details of the documents

Proposal for a Directive of the European Parliament of the Council on unfair trading practices in business-to-business relationships in the food supply chain: (39625), 7809/18 + ADDs 1–3, COM(18) 173.

Previous Committee Reports

Thirty-third Report HC 301–xxxii (2017–19), chapter 4 (27 June 2018); Twenty-eighth Report HC 301–xxvii (2017–19), chapter 1 (16 May 2018).


8 Thirty-third Report HC 301–xxxii (2017–19), chapter 4 (27 June 2018).

9 Letter from George Eustice to Sir William Cash, dated 26 September 2018.

10 Letter from George Eustice to Sir William Cash, dated 20 July 2018.

11 “Better protection for farmers against unfair trading practices: Council agrees its negotiating position”, Council Press Release, 1 October 2018.




Published: 16 October 2018